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Far East Orchard increases earnings by more than 100% y-o-y for FY2023 to $66 mil

Nicole Lim
Nicole Lim • 2 min read
Far East Orchard increases earnings by more than 100% y-o-y for FY2023 to $66 mil
The group says this was mainly due to fair value gains on its UK purpose-built student accommodation portfolio. Photo: Far East Orchard
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Far East Orchard has reported earnings of $66 million for the FY2023 ended Dec 31, 2023, a more than 100% y-o-y increase from the same period a year before. 

This is mainly due to fair value gains on investment properties of $58.3 million, largely from the group’s UK purpose-built student accommodation (PBSA) portfolio.

The group’s earnings per share came in at 13.7 cents for the FY2023, also more than a 100% y-o-y increase from 4.7 cents in FY2022. 

The group’s full year revenue increased 30.3% to $183.6 million, compared to $141 million for the FY2022, boosted by the performance of its hospitality business. 

Revenue from its hospitality business increased 40.5% to $126.9 million in FY2023, due to the recovery in global corporate and leisure travel over the past year, since the re-opening of the borders from second quarter of FY2022, driving higher occupancies and average daily rates.

The UK PBSA business was driven by a strong demand for beds from domestic and international students and a supply shortage across key UK university cities. 

See also: Japan Foods sinks into $0.5 mil net loss for FY2024

For the full year, revenue in this segment increased 13.8% to $46.4 million with a portfolio occupancy of 99%, and a higher rental rate for the academic year which commenced in September 2022.

As at Dec 31, 2023, the group’s gearing ratio was 44.1%, and cash and cash equivalents were $225.6 million, a drop from the $233.2 million in the same period a year before. 

The group has declared a first and final dividend of 4 cents per share for FY2023.

See also: Stamford Land FY2024 earnings shrink 96.1% y-o-y on absence of divestment gains

In 2023, Far East Orchard O10 -

opened six new hotels, totalling more than 750 rooms, across Australia, Japan, Malaysia, and Switzerland, a new country addition. 

As at Dec 31, 2023, the group’s hospitality arm, Far East Hospitality, together with its joint venture, Toga-Far East Hotels, owns or operates close to 100 hospitality assets with more than 16,600 rooms in ten countries.

For 2024, approximately 600 rooms are expected to open across Australia, Germany and Singapore.

The group is “cautiously optimistic” of the outlook of the hospitality business. On the other hand, it expects the demand for its PBSA segment to remain strong in 2024, underpinned by a record-high student population and acute supply shortage, with the market experiencing a current shortfall of 580,000 beds.

Shares in Far East Orchard closed flat at $1.03.

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